Thursday, June 18, 2015

Flipkart, Snapdeal to tie up with India Post for same-day delivery

BENGALURU: Online marketplaces Flipkart and Snapdeal could follow in Amazon's footsteps and join hands with India Post's Bengaluru chapter to provide same-day delivery for customers in the city according to a senior official in the postal department.

The technology capital is the first city where India Post began delivering packages to customers of online marketplace Amazon on the day an order is placed.

"The national postal service is in informal talks with Flipkart and Snapdeal who have responded positively to the metro delivery service," said BS Chandrashekhara, assistant director for business development at the Department of Posts, Karnataka Circle.

Since April, when the service for Amazon was launched, the department has been delivering an average of 2000 orders daily in Bengaluru, according to postal officials. The Bengaluru experiment is a pilot project before the postal service can make plans for the rest of the country.

"We are testing our own capabilities," said MS Ramanujan, chief post master general of Karnataka, who said the results of this pilot project in Bengaluru will help the department draw up similar plans for other cities.

A spokeswoman for Snapdeal old ET that while the company is collaborating with India Post extensively for delivery at multiple pincodes, "it's too early to speak about plans for metro delivery service." Flipkart did not respond to email queries from ET.

According to a Goldman Sachs report, the Indian e-commerce market is expected to grow to $300 billion by 2030. India Post will compete in a market where specialist delivery firms like Ecom Express, Delhivery and Go Javas are raising venture funding to expand operations.

Experts are of the view that India Post with its deep reach even in small towns, can become a formidable competitor as a full-fledged logistics company. "The e-commerce companies which are struggling to reach out to all pincodes will also find India Post the most credible option for last mile deliveries," said Arvind Singhal, chairman and managing director of Technopak.

Amazon which was the first to partner with the postal department has "integrated its own technology with the postal service for same-day delivery in Bengaluru," said Amit Agarwal, vice president and country manager of Amazon India.

Delhi and Mumbai are next in line for India Post's same-day-delivery, with limited pin-codes in Chennai and Coimbatore being covered at present. Fashion portal Myntra is also using India Post's cash-on-delivery service on a pilot basis in Bengaluru.

The department prices same-day-delivery orders priced according to average charges fro its speed posts service. The metro delivery service has contributed to 30% of India Post's total revenue in the city in the last three months according to department officials.